Small and medium-sized FDI enterprises exempted from corporate income tax for the first 03 years of establishment

In an effort to improve the investment environment and support start-up enterprises, competent State agencies continuously promulgate and update tax incentive policies. Most recently, on June 11th , 2026, the Tax Department issued Official Letter No. 3896/CT-CS to provide detailed guidance on corporate income tax (“CIT”) policies under Decree No. 20/2026/ND-CP. This Official Letter has opened up an opportunity to access an extremely important incentive: A 03-year CIT exemption for small and medium-sized foreign direct investment (“FDI”) enterprises. 

Foreign investors and economic organizations must clearly understand the legal bases, from foundational definitions to exceptional cases, to apply them correctly and maximize this opportunity. 

1. Legal basis for determining small and medium-sized enterprises: 

Regarding the definition, pursuant to Article 4.10 of the Law on Enterprises 2020: “An enterprise means an organization with a proper name, assets, a transaction office, established or registered for establishment in accordance with the law for business purposes.”. 

Based on that foundation, for an enterprise to be classified as a small and medium-sized enterprise (“SME”), it must meet the criteria prescribed in Article 4 of the Law on Support for Small and Medium-Sized Enterprises 2017. Specifically, the core criteria include: 

  • Regarding labor scale: The enterprise has an average annual number of employees participating in social insurance not exceeding 200 people.   
  • Regarding financial scale: Concurrently with the labor criterion, the enterprise must satisfy one of the two following conditions:  
  1. Total capital does not exceed VND 100 billion; or  
  2. Total revenue of the preceding year does not exceed VND 300 billion.

Only when simultaneously satisfying the labor criterion and one of the aforementioned financial criteria, will an FDI enterprise be considered eligible for tax incentives. 

2. Conditions for applying the 03-year CIT exemption policy: 

According to the guidance in Official Letter No. 3896/CT-CS, FDI enterprises will enjoy the privilege of CIT exemption for a continuous period of 03 years from the date of issuance of the first Enterprise Registration Certificate (“ERC”), provided that they fully meet the following conditions: 

  • Being established and registered to operate in strict compliance with the provisions of Vietnamese law; 
  • Being granted the first ERC; 

3. Exceptional cases not eligible for the incentive: 

Although the policy is highly encouraging, to prevent policy profiteering (e.g., continuously establishing new companies to evade taxes), Decree No. 20/2026/ND-CP clearly stipulates legal barriers. The 03-year tax exemption incentive will NOT apply in the following cases: 

First, newly established enterprises formed from the process of merger, consolidation, division, separation, change of owner, or conversion of enterprise type. 

Second, newly established enterprises where the legal representative (except where the legal representative is not a capital contributing member), the general partner, or the person with the highest capital contribution has participated in business activities under the role of a legal representative, general partner, or person with the highest capital contribution in currently operating enterprises or enterprises that have been dissolved for less than 12 months, calculated from the time of dissolving the old enterprise to the time of establishing the new enterprise. 

Third, the incentive does not apply to specific incomes stipulated in Article 18.3 of the Law on Corporate Income Tax 2025. 

4. Conclusion: 

The issuance of Official Letter No. 3896/CT-CS guiding Decree No. 20/2026/ND-CP is a highly positive signal, expanding opportunities for start-up FDI enterprises in Vietnam to access tax incentives.  

However, legal regulations on taxation always demand high accuracy and strict compliance. Investors and economic organizations must proactively and carefully review their actual dossiers, comparing them against the quantitative criteria for SMEs as well as the exceptional cases, to ensure that the application of the incentive is lawful, thereby avoiding the risks of tax arrears or administrative sanctions in the future. 

Submission date: Jun 20th 2026

Related posts

  1. Notable points for enterprises subdividing imported cosmetics for trading
  2. Criteria for identifying small and medium-sized enterprises taking effect from October 15th, 2021

Disclaimers:

This article is for general information purposes only and is not intended to provide any legal advice for any particular case. The legal provisions referenced in the content are in effect at the time of publication but may have expired at the time you read the content. We therefore advise that you always consult a professional consultant before applying any content.

For issues related to the content or intellectual property rights of the article, please email cs@apolatlegal.vn.

Apolat Legal is a law firm in Vietnam with experience and capacity to provide consulting services related to Business and Investment and contact our team of lawyers in Vietnam via email info@apolatlegal.com.



Nguồn: https://ift.tt/5RXS8IQ
Map: https://goo.gl/maps/JbCF1FiWPuD2Jsnx6
Thông tin: https://www.google.com.vn/search?q=Apolat+Legal&kponly=&kgmid=/g/11jkvqgmw_

Comments

Post a Comment

Popular posts from this blog

Chi phí thành lập công ty hết bao nhiêu tiền? Cập nhật mới nhất 2023

Image
Chi phí thành lập công ty là một trong những vấn đề quan trọng nhất mà bất kỳ doanh nghiệp mới nào cũng phải đối mặt khi bắt đầu hoạt động. Nếu bạn đang lên kế hoạch để thành lập một công ty hãy cùng Apolat Legal tìm hiểu rõ hơn về chi phí thành lập công ty và các yếu tố ảnh hưởng đến chi phí này nhé! Chi phí thành lập công ty 1. Chi phí thành lập công ty gồm những gì? 1.1. Lệ phí công bố nội dung đăng ký doanh nghiệp Theo Thông tư 47/2019/TT-BTC ngày 05 tháng 08 năm 2019 của Bộ Tài chính, lệ phí thành lập doanh nghiệp công bố nội dung đăng ký doanh nghiệp là 100.000 đồng. 1.2. Chi phí khắc dấu tròn doanh nghiệp Chi phí thành lập công ty khắc dấu tròn doanh nghiệp là 400.000 đồng. Công ty tự khắc dấu và quản lý con dấu của Công ty. 1.3. Chi phí mua chữ ký số khai thuế Chi phí mua chữ ký số khai thuế khi thành lập công ty thời hạn 1 năm dao động tầm khoảng 1.600.000 đồng và thời hạn 3 năm là 2.700.000 đồng. Chữ ký số được dùng để gửi báo cáo thuế và các loại báo cáo khác qua mạng. Chi p...
Read more

The role of intellectual property expert opinions in resolving intellectual property infringement

Image
Intellectual property infringement 1. The connection between expert opinions and resolving intellectual property infringement   The legal framework for intellectual property in Vietnam, especially the Law on Intellectual Property, clearly stipulates the role of IP expert assessment in determining infringement acts. An expert opinion issued by VIPRI is a crucial, highly specialized piece of evidence that provides a basis for agencies such as Courts, Police, Customs, etc., to assess the degree of similarity, likelihood of confusion, or other factors related to the infringement act.   Particularly in complex cases involving intellectual property rights such as inventions, industrial designs, trademarks, or copyrights, the expert opinion plays a pivotal role in clarifying specialized elements that disputing parties or competent authorities often find difficult to assess themselves. For instance, for inventions, determining novelty, inventive step, or industrial applicability ...
Read more

Overview of technology transfer agreements

In the context of global economic integration, technology transfer plays a crucial role in Vietnam’s socio-economic development. The adoption, application, and innovation of technology not only help businesses enhance their competitiveness but also optimize production processes and create high-value products. The Law on Technology Transfer 2017 was enacted to establish a transparent legal framework to regulate, coordinate and promote technology transfer activities in Vietnam. It also encourages businesses to engage in innovation and improve their access to advanced technologies. Among these legal frameworks, the Technology Transfer Agreement serves as an essential legal instrument, recognizing and safeguarding the rights and obligations of the parties involved in technology transfer. 1. Introduction to Technology Transfer Agreements A Technology Transfer Agreement is an agreement between parties in which one party (the transferor) transfers ownership rights or grants the right to us...
Read more